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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4265  OF 2019 [Arising out of S.L.P.(C)No.31176 of 2018]

Hari Steel and General Industries Ltd. & Anr. ... Appellants

Versus

Daljit Singh & Ors.    ... Respondents

J U D G M E N T

R. Subhash Reddy, J.

1.   Leave granted.

2.  This Civil Appeal is filed by the defendant Nos. 1

and 2 in the Suit in CS(OS) No.2046 of 2006, aggrieved by

the judgment dated 2nd August, 2018, in FAO (OS) No.268 of

2017, passed by the High Court of Delhi at New Delhi. By the

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aforesaid judgment, the Division Bench of the High Court, by

setting  aside  the  judgment  dated  24.7.2017  passed  in  IA

No.1557 of 2007 in CS (OS) No.2046 of 2006, has allowed the

interlocutory application and consequential prayers of the

respondents-plaintiffs  and  decreed  the  suit  with  the

following directions:-

“(i) The order dated 24th July, 2017 passed by the ld. Single Judge on I.A. No.1557/2007 in  CS(OS) No.2046/2006 is hereby set aside and quashed.

(ii)I.A.No.1557/2007  is  hereby  allowed  and consequently the  prayers  of  the  plaintiffs  in the suit, as prayed for,are decreed.

(iii) The Registry shall draw up a decree sheet accordingly.

(iv) The appellants shall pay the balance amount of 50.50 Crores to the defendant no.1 within a₹ period  of  three  months  and  15  days  from today.

(v) Upon receipt of the amount, the respondents shall forthwith  execute  the  sale  deed  in favour of the appellants as well as any other documents, as may be required.  It shall be the responsibility of the respondent no.2 to complete the formalities including obtaining permissions, if  any,  from  any  authority  of  department  and ensure  execution  of  the  registered   sale  deed forthwith in favour of the appellants.

(vi) In case the respondents do not accept the payment of the amount from the appellants, the amount shall be deposited by the appellants in

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CS(OS)No.2046/2006 by way of cheque in the name of Registrar  General  of  this  court.   Upon  the deposit, the said cheque shall be encashed by the Registry and the amount thereof shall be kept in a Fixed Deposit Receipt initially for a period of six months to be kept renewed till further orders of the ld. Single Judge in the suit proceedings.

(vii) In such eventuality, the appellants shall be entitled to seek appropriate remedy for execution of  the  judgment  and  decree  by  appropriate proceedings by the ld. Single Judge.

(viii) Given the delay caused by the respondents in  the  adjudication  of  the  matter  and  their conduct before the court, the respondents shall pay costs to the appellants at the rate of 1 Lac₹ for  each  year  of  the  litigation  w.e.f.  1st

November,  2006  to  July,  2018  being  a  total  of 11,50,000/- for the period of 11 1/2 years.₹

(ix) Costs of 1,00,000/- each are directed to be₹ paid  to  the  Delhi  High  Court  Legal  Services Committee;  Delhi  High  Court  Mediation  and Conciliation  Centre  and  the  Delhi  International Arbitration Centre, which shall be paid by the respondents within 15 days from today and proof of deposit shall be filed with the Registry.  The copy of the receipts shall be made available to the  appellants  through  counsel  immediately  upon the deposit.

(x) In case the respondents fail to deposit the costs as at S.no.(viii) & (ix) above, as directed, the appellants shall be entitled to deduct the amount  of  costs  out  of  the  balance  sale consideration and to deposit the costs of 1 lakh₹ with each of the DHCLSC, DHCMCC & the DIAC.  Proof of deposit shall be sent to the defendants.

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(xi) In view of the order we are passing regarding payment  up  to  date  costs  in  the  suit,  we  are refraining  from  imposing  further  costs  on  the respondents in the present appeal.

(xii) The appeal is allowed in the above terms.”

3. The learned Single Judge has dismissed the application

in I.A. No.1557 in the aforesaid suit, filed under Order XII

Rule 6 of the Civil Procedure Code.  The respondent Nos. 1

and 2 – plaintiffs, have filed the aforesaid application for

judgment, on admissions claimed by them in the suit. The

order of learned Single Judge is reversed by the Division

Bench  on  appeal,  filed  by  the  plaintiffs,  by  granting

reliefs as referred above.  

4. The respondents-plaintiffs have filed the above said

suit  praying  for  decree  for  specific  performance  of

agreement  to  sell,  concluded  on  7.4.2005  and  further

recorded on 3.5.2005 between the respondents-plaintiffs and

the appellants in respect of property bearing No.A-22, Mohan

Cooperative Industrial Estate, Mathura Road, New Delhi.  The

plaintiffs  also  sought  a  decree  of  permanent  injunction

against  the  appellants-defendants  and  others  to  restrain

them  from  selling,  transferring  or  encumbering  the  suit

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property to third party and a permanent injunction against

defendant Nos. 2 to 6 from transferring or encumbering their

share  holdings  of  10  lakh  shares  in  the  appellant

No.1/defendant  No.1  company.   It  was  the  case  of  the

plaintiffs, that the appellant No.2 herein, as a Managing

Director and principal share holder of the appellant No.1

company, approached the respondents-plaintiffs for sale of

suit property and the business carried in the name and style

of  ‘South  Delhi  Toyota’  including  the  goodwill  of  the

business.  It is their case that on 7.4.2005, the respondent

Nos. 1 and 2 – plaintiffs and the first appellant company

through its Managing Director/2nd appellant have arrived at a

concluded agreement for sale of the suit schedule property,

transfer of the goodwill and franchisee rights in respect of

the running business of ‘South Delhi Toyota’ for a total

consideration of Rs.55.50 crores.  It is their further case

that pursuant to the said concluded contract on 7.4.2005,

the  respondents-plaintiffs  have  paid  an  amount  of  Rs.2

crores, i.e, Rs.1 crore in cash and Rs.1 crore by cheque and

the  said  amount  was  acknowledged  by  the  appellant  No.2.

It is their further case that they have entered into written

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agreement  to  sell  on  3.5.2005,  in  pursuance  of  an

understanding/agreement dated 7.4.2005.  The breakup of the

total  consideration  disclosed  in  the  agreement  is  as

follows:-

(i) Rs.49 crores for the purchase of the land and building bearing No.A-22, Mohan Co-operative Industrial Estate, Mathura Road, New Delhi.  

(ii) Rs.6 crore fifty lacs for the purchase of running business of the franchisee dealership of Toyata Kirloskar Motors Private Limited carried on in the name and style of ‘South  Delhi Toyota’.

(iii) The difference in value of the assets and liabilities of  the  running  business,  on  the basis of the balance sheet agreed  to  be furnished on 15.6.2005.

5. It is the further case of the plaintiffs that they

have  paid  further  amount  of  Rs.3  crores  on  the  date  of

written agreement of sale dated 3.5.2005 to the appellant

No.1 company. In the agreement dated 3.5.2005, the aspect of

payment of part consideration is recorded as follows:

“2(a)  That  out  of  the  total  consideration  of Rs.55.50,00,000/-  (Rs.Fifty  five  Crores  Fifty Lacs only) the purchasers have paid to the vendor a sum of Rs.5,00,00,000/- (Rs.Five Crores only) as part consideration; at the time of execution of  this  Agreement  to  Sell  in  the  following manner:

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a) Cheque no.840711 dt 7.4.2005 drawn on ICICI Bank,  Punjabi  Bagh  West,  New  Delhi  – Rs.1,00,00,000/- (Rs. One Crore only)

b) Cheque no. 840633 dt 28.4.2005 drawn on ICICI Bank,  Punjabi  Bagh  West,  New  Delhi  –  Rs. 1,00,00,000/-

c) Cash – Rs.3,00,00,000/- ( Rs. Three Crores only)

The receipt of which the vendor hereby acknowledges.”

   6. The  appellants-defendants  in  the  suit,  have  filed

their written statement on 25.01.2007.

7. In the written statement filed, the appellants have

raised  preliminary  objections  stating  that  respondents-

plaintiffs  have  forged/fabricated,  the  agreement  to  sell

dated 3.5.2005, by forging the signatures of Director of the

appellant No.1, namely, Mr. Ram Dilawari, as such, they are

liable  for  prosecution  under  Section  195(1)(b)  of  the

Criminal Procedure Code.  Further objection is also raised

questioning the very maintainability of the suit, in view of

the proceedings initiated by them in I.A.No.61 of 2006 in CS

(OS)No.1508  of  2005  under  Section  340  of  the  Criminal

Procedure Code, wherein they have challenged the genuineness

of the agreement dated 3.5.2005.  They also pleaded that the

suit is barred by Section 16 of the Specific Relief Act,

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1963, in absence of any plea of readiness and willingness,

to perform the contract on their part.

8. While opposing the reliefs as prayed for in the suit,

the  appellants-defendants  have  pleaded  that  although  an

agreement was entered into with the respondents-plaintiffs

for sale of land ad-measuring 19074.69 sq. yards bearing

no.  A-22,  Mohan  Co-operative  Industrial  Estate,  Mathura

Road,  New  Delhi,  but  the  said  contract  was  never

crystallized, as the nature, extent and various clauses were

yet to be finalized.  It is pleaded that the same is evident

from  the  fact  that  all  the  necessary  columns  in  the

agreement dated 03.05.2005 were left blank and were to be

filled, after mutual agreement only.  Specific averment is

made, stating that respondents-plaintiffs in connivance with

Mr.T.R. Arya i.e. 3rd  defendant have fabricated facts and

figures  including  the  signatures  on  the  agreement.   The

appellants-defendants have disputed receipt of Rs.3 crores,

which amount is allegedly paid by the respondents by way of

cash.  It is pleaded that the respondents-plaintiffs have

fraudulently  incorporated  the  payment  of  Rs.3  crores,

pertinently in cash, while only the payment of Rs.2 crores

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was  made  by  cheque.   In  the  written  statement  specific

allegation is made stating that, Mr. T.R. Arya (defendant

No.3) has abused his position in appellant No.1 company, in

connivance with the plaintiffs and indulged in a fraud. In

the  written  statement  appellants  have  disputed  the

signatures  on  page  nos.  3  and  4  of  the  agreement  dated

3.5.2005. While denying the various allegations made by the

plaintiffs, the appellant-defendants while stating that in

absence of any finalized agreement to sell the property and

in absence of any cause of action suit is filed for specific

performance and same is not maintainable and is liable to be

dismissed.

9. After filing of the written statement on 25.01.2007,

in which specific averment is made to the effect that the

respondents-plaintiffs were not ready and willing to perform

the  contract,  the  respondents-plaintiffs  have  filed

I.A.No.3370 of 2007 on 20th March, 2007 for amendment of the

plaint, to incorporate the plea of their willingness and

readiness, and the same is allowed by order dated 16th April,

2007.

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10. In  the  aforesaid  suit,  statement  of  the  appellant

No.2/defendant No.2 was recorded on 21.9.2007.  Thereafter,

one Mr. Praveen Kumar Jolly who claimed earlier agreement in

his favour for half portion of suit property, also filed

I.A.No.5422 of 2007 for his impleadment in the suit and same

was  allowed  on  8.12.2008.  He  has  also  filed  written

statement subsequently.  In view of the contest for all the

reliefs sought in the suit, issues and additional issues

were framed on 02.02.2010 and 05.05.2010.  The issues and

additional issues framed in the suit read as under:-

  “Issues framed:

1. Whether the Plaintiffs are entitled to a decree for specific performance of the agreement to sell dated 03.05.2005 if so, to what effect? OPP

2. Whether pages 3 and 4 of the agreement to sell dated  03.05.2005  have  been  executed  by  the defendant no.2 or not, if so to what effect? OPD-1 to 6

3. Whether the receipt dated 07.04.2005 is forged and fabricated? OPD-1 to 6

4.  Relief.

Additional issues:

1. Whether there is a concluded contract between the parties? OPP 2. Whether there have been insertion/interpolations in  the  agreement  relied  upon  by  the  Plaintiffs,

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consequently  rendering  that  agreement  to  sell enforceable? OPD.”     

11. After filing written statement in the suit, respondent

Nos. 1 and 2/plaintiffs have filed I.A.No.1557 of 2007 under

Order  XII  Rule  6  of  CPC,  praying  for  judgment  based  on

certain claimed admissions.  A copy of the application filed

in I.A.No.1557 of 2007 is placed on record. The aforesaid

application is filed mainly claiming that the appellants in

bail application nos.4109-4110 of 2006 seeking anticipatory

bail in connection with the crime registered on complaint

filed  by  impleaded  4th  respondent,  have  categorically

admitted their readiness and willingness to execute a sale

deed  in  their  favour,  in  terms  of  the  agreement  dated

3.5.2005.  The  bail applications referred above were filed

in connection  with the crime registered in FIR No.517 of

2006 on the file of Police Station Sarita Vihar, which was

registered on the complaint filed by Sri Praveen Kumar Jolly

(First Buyer) registered for offences under Sections 420 and

120B IPC. The aforesaid complainant, Sri Praveen Kumar Jolly

has alleged that during the subsistence of MOU entered in

their favour on 24.5.2003, for a portion of the schedule

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property  have  entered  into  another  agreement  with  the

respondent Nos. 1 and 2 on 3.5.2005.  Thus, it is pleaded

that  the  appellants  herein  by  entering  into  multiple

agreements have committed  the offence of cheating.  Except

claimed  admissions  alleged  to  have  been  made  by  the

appellants-defendants’  counsel  during  the  hearing  of  the

anticipatory  bail  application,  no  other  admissions  are

claimed  in  the  application.  The  said  interlocutory

application is contested by appellants and other defendants

who have seriously disputed the genuineness of the agreement

dated 3.5.2005 alleging that pages 3 and 4 of the agreement

have  been  replaced  and  substituted  by  pages  which  bear

forged signatures of the defendant No.2.  Further they also

disputed  stating  that,  all  throughout  the  case  of  the

appellants is only admitting receipt of Rs.Two crores but

not Rs.Five crores as claimed by the plaintiffs.  Further,

the  relief  sought  in  the  interlocutory  application  is

opposed  by  the  appellants  pleading  that  the  forgery  and

fabrication of the agreement dated 3.5.2005 came to light

when the said agreement was produced by the plaintiffs in

CS(OS) No. 1508 of 2005 filed by Sri Praveen Kumar Jolly and

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immediately  on  receipt  of  copy  of  the  agreement  dated

3.5.2005, they also filed an application in I.A. No.61 of

2006 in CS(OS) No.1508 of 2005 under Section 340 of Cr.P.C.,

challenging the genuineness of the agreement dated 3.5.2005.

Thus, it is pleaded that unless genuineness of the agreement

dated 3.5.2005 is decided finally, no decree for specific

performance can be claimed.

12.  The learned Single Judge, by recording that there is a

serious dispute with regard to payment of Rs.Five crores as

per the agreement entered into by the appellants, and the

alleged  forgery  of  signatures  on  pages  3  and  4  of  the

agreement as claimed by the appellants-defendants, has held

that such  issues are to be resolved only post trial, after

the parties adduce oral and documentary evidence.  Further

the learned Single Judge was of the view that to claim a

decree on admissions it is essential that admissions should

be clear and unequivocal. With the aforesaid findings, the

learned Single Judge, by an order dated 24.7.2017, dismissed

the application in I.A.No.1557 of 2007 by imposing a cost of

Rs.50,000/- on the respondents-plaintiffs.

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13. Aggrieved by the order of the learned Single Judge,

the respondents have preferred Appeal under Section 10 of

the Delhi High Court Act, 1966.  The Division Bench, by the

impugned judgment dated 2.8.2018, has set aside the order of

the  learned  Single  Judge  dated  24.7.2017  and  allowed

I.A.No.1557 of 2007 by granting consequential reliefs and

permitted  the  respondents-plaintiffs  to  pay  the  balance

amount of Rs.50.50 crores within a period of three months

and 15 days, from the date of the judgment.  The Division

Bench was of the view that the appellants have admitted,

entering into an agreement with the respondents-plaintiffs

on 3.5.2005 and the receipt of Rs.Five crores is evident

from the Director’s Report and balance-sheets of the company

for the year ending on 31st March, 2005; 31st March, 2006 and

31st March, 2007.  Further by holding that defence of the

appellants in the suit is not genuine and contrary to the

pleadings on court’s record as well as statutory filings

under Companies Act, and that there is no genuine triable

issue  which  could  justify  the  trial  in  the  suit,  the

Division Bench rendered judgment on claimed admissions.

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14. Learned senior counsels Sri Ranjit Kumar and Sri P.S.

Narsimha,  appearing  for  the  appellants  have  made  the

following submissions:  

15. Though  there   are  no  categorical  and  unconditional

admissions, as claimed by the respondents-plaintiffs, the

Division Bench of the High Court went beyond the scope of

the application and allowed the same. The suit was filed in

the year 2006, in which written statement is already filed

by the appellants.  In view of the serious factual disputes

raised  by  the  appellants  claiming  forgery  of  their

signatures on pages 3 and 4 of the agreement to sell dated

3.5.2005 and the receipt of Rs.Five crores, specific issues

are framed and findings on which can be arrived only after

trial.  It is stated that the application filed under Order

XII Rule 6 of CPC is kept pending for more than a decade and

disposed  of  after  trial  is  commenced  in  the  suit;

Categorical  and  unconditional  admissions  alone  can  be

considered for the purpose of grant  of relief under Order

XII Rule 6 of CPC. Certain observations made in the criminal

proceedings  in  connection  with  the  bail  application  are

misconstrued as admissions by the High Court for the purpose

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of deciding the application filed under Order XII Rule 6 of

CPC; The suit itself is for grant of specific performance of

agreement,  which  is  discretionary  and  equitable  relief,

court can come to conclusions only after full fledged trial

by answering several contentious issues in the suit.  Even

the  relief  claimed  under  Order  XII  Rule  6  is  also  a

discretionary  one  and  no  party  can  claim  judgment  as  a

matter of right. To support this plea, learned counsel has

placed reliance on the judgment in the case of S.M. Asif

vs.  Virender Kumar Bajaj1.  To  substantiate his plea that

admission should be categorical and unconditional, relied on

the judgment of this Court in the case of  Himani Alloys

Limited   vs.  Tata Steel Limited2.  In support of the plea

that  in  a  suit  filed  for  specific  performance,  it  is

mandatory to plead and prove readiness and willingness of

the plaintiff to perform his part of the contract, relied on

the judgment in the case of Balraj Taneja and another   vs.

Sunil Madan and another3.  In support of the plea that in

view of the tampering and fabrication of the agreement of

sale, same cannot be considered as a valid and concluded

1 (2015) 9 SCC 287 2 (2011) 15 SCC 273 3 (1999) 8 SCC 396

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contract for grant of discretionary and equitable relief,

learned counsel has placed reliance on the judgment of this

Court in the case of  Kamal Kumar vs   Premlata Joshi4 and

also the judgment of this Court in the case of  Saradamani

Kandappan  vs.  S. Rajalakshmi and ors.5. In support of his

plea that inconsistent pleas are permissible in the written

statement, reliance is placed on the judgment in the case of

Baldev Singh and Ors. vs.  Manohar Singh and another6 and

also on the judgment in the case of  Usha Balashaheb Swami

and ors. vs.  Kiran Appaso Swami and ors.7.     

16. On  the  other  hand  Mr.  Shyam  Divan,  learned  senior

counsel  appearing  for  the  first  respondent-plaintiff  has

made the following submissions.    

17. The impugned judgment is based on several admissions

made by the appellants to perform their contract entered on

7.4.2005 and 3.5.2005; by referring to the provision under

Order XII Rule 6 of CPC 1908 as substituted by Act 104 of

1976, it is submitted that wide meaning is to be given to

the said provision; as per the amendment court is empowered

to deliver judgment where admissions of fact have been made

4 2019 SCC Online SC 12 5 (2011) 12 SCC 18 6 (2006) 6 SCC 498 7 (2007) 5 SCC 602

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either in the pleadings or otherwise, whether orally or in

writing.  The appellants have made clear admissions before

the court for securing favourable orders, with regard to

their admission of entering into agreement to sell and also

receipt  of  Rs.Five  crores  amount  towards  the  part

consideration; that balance-sheets and statutory forms which

are filed under the provisions of the Companies Act, 1956 on

behalf  of  the  first  appellant  company,  also  reveal

admissions made by the appellants; in the pleadings in the

suit filed by Mr. Praveen Kumar Jolly, the appellants have

admitted the acceptance of the agreement as entered into,

without any allegation of tampering and fabrication, without

disputing receipt of Rs.Five crores, as such there are no

grounds to interfere with the impugned judgment.   

18.  In support of the plea that Order XII Rule 6 of CPC

is to be interpreted widely and there is no need to narrow

down the meaning contrary to its objective, learned senior

counsel placed reliance on the judgment in the case of Uttam

Singh Duggal & Co. Ltd.   vs.  United Bank of India & Ors.8

8 (2000) 7 SCC 120

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and also in the case of Karam Kapahi & Ors. vs. Lal Chand

Public Charitable Trust & Anr.9   

19. In  support  of  the  plea  that  entries  made  in  the

balance-sheet and Director’s report of the company are to be

construed as admissions, reliance is placed on the judgment

in the case of Usha Rectifier Corporation (India) Limited

vs.  Commissioner of Central Excise, New Delhi10.

20. In support of the plea that an admission made by a

party in a plaint signed and verified by him may be used as

evidence against him in other suits, reliance is placed on

the judgment in the case of Basant Singh vs. Janki Singh &

Ors.11.  Reliance is also placed by the Division Bench of the

Delhi High Court on the judgment in the case of Vijaya Myne

vs.  Satya Bhushan Kaura12 wherein the Division Bench of the

Delhi High Court has upheld the final order and judgment

passed  by  the  learned  Single  Judge  wherein  specific

performance was ordered relying on certain admissions made

by the defendant.

21. Mr.  Basant,  learned  senior  counsel  appearing  for

respondent No.2, by referring to Order XII Rule 6 of CPC has

9 (2010) 4 SCC 753 10 (2011) 11 SCC 571 11 AIR 1967 SC 341 12 2007 (142) DLT 483

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submitted that power conferred as per the said provision is

not only on application but court may, on its own, also

deliver judgment based on admissions either in the pleadings

or otherwise.  As such, it is submitted that wide meaning is

to be given to the said provision, having regard to the

object and the intendment of the Rule.  

22. Mr.  Dholakia,  learned  advocate  appearing  for

respondent No.3 has submitted that, several admissions of

the  appellants  are  evident  from  the  balance-sheets  filed

before the Registrar of Companies.  It is submitted that in

the  absence  of  any  application  for  revision  of  balance-

sheet,  entries  made  in  such  balance-sheets  are  rightly

considered  as  admissions  by  the  Division  Bench  in  the

impugned judgment.  In support of the plea, learned counsel

has relied on the judgment in the case of Rajiv Srivastava

vs.  Sanjiv Tuli and another13 and also the judgment in the

case of Thimmappa Rai   vs.  Ramanna Rai and others14 and the

judgment in the case of Ultramatix Systems Pvt. Ltd.   vs.

State Bank of India & Ors.15    

13 AIR 2005 Delhi 319 14 (2007) 14 SCC 63 15 (2007) 4 Mh.L.J. 847

S.L.P.(C) No.31176 of 2018                                                                                             21

23. Sri Ranjit Kumar, learned senior counsel in rejoinder

arguments has submitted that the admissions referred in the

Order XII Rule 6 of CPC must be in the same suit but no

application can be entertained based on admissions alleged

to  have  been  made  in  another  suit  and  also  in  criminal

proceedings.  By referring to the definition of “pleadings”

as  defined  under  Order  VI  Rule  1  of  CPC  has  further

submitted that the term “otherwise” referred to in Order XII

Rule 6 of CPC is for the limited purpose of ‘other than

pleadings’ in the suit, but not to enlarge the scope of the

application  by  covering  admissions  in  other  suits  and

criminal proceedings.   

24. Sri  P.S.  Narsimha,  learned  senior  counsel  appearing

for the second appellant has submitted that as much as the

suit is for specific performance of the agreement and the

same is a discretionary and equitable relief and in a given

situation, the court may also refuse grant of decree of

specific performance, even if the agreement is held to be

proved.  Learned counsel has placed reliance on the judgment

in the case of Aniglase Yohannan  vs.  Ramlatha and Ors.16.

16 (2005) 7 SCC 534

S.L.P.(C) No.31176 of 2018                                                                                             22

25. Having heard the learned counsel for the parties, we

have perused the impugned order and other materials placed

on record. The impugned order is passed on an application

filed by the respondents-plaintiffs, under Order XII Rule 6

of CPC.  The said provision under Order XII Rule 6 read as

under:

“6.Judgment on admissions.-(1) Where admissions of fact  have  been  made  either  in  the  pleading  or otherwise, whether orally or in writing, the Court may  at  any  stage  of  the  suit,  either  on  the application of any party or of its own motion and without waiting for the determination of any other question  between  the  parties,  make  such  order  or give  such  judgment  as  it  may  think  fit,  having regard to such admissions.

(2) Whenever a judgment is pronounced under sub-rule (1), a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced.”    

26. The aforesaid Rule was amended by Act 104 of 1976, by

which several amendments were made to the Code of Civil

Procedure, 1908.  Earlier to 1976 amendment, judgment on

admissions was confined only on application in writing. By

virtue of the amendment whether admissions are oral or in

writing, court is empowered at any stage of the suit to give

judgment on such admissions.      

S.L.P.(C) No.31176 of 2018                                                                                             23

27. In the case on hand, at first instance a Memorandum of

Understanding was entered into by the appellants with the

respondent No.4 i.e. Mr. Praveen Kumar Jolly on 24.05.2003

with respect to half of the suit property.  It is the case

of the appellants that due to non-compliance of the terms of

MOU, by Mr. Praveen Kumar Jolly, the said MOU was terminated

in August, 2004 and subsequently an arrangement/contract is

entered into with respondent nos.1 and 2 – plaintiffs on

7.4.2005 and subsequent agreement dated 3.5.2005.  It is the

specific case of the appellants that contractual terms were

not crystallized as such there were several blanks in the

agreement  dated  3.5.2005.   While  it  is  the  case  of  the

respondents-plaintiffs that an amount of Rs. Five crores was

paid, i.e. Rs. Two crores by way of cheque and Rs.Three

crores by way of cash, the same is seriously disputed by the

appellants-plaintiffs stating that only an amount of Rs. Two

Crores was paid and the payment of Rs. Three crores is a

fabrication of the agreement to sell dated 3.5.2005 on pages

3 and 4 of the document.  Based on the earlier MOU by the

appellants with Mr.Praveen Kumar Jolly i.e. 4th respondent

herein,  4th respondent  has  filed  a  suit  for  specific

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performance of the agreement in CS(OS) No.1508 of 2005 in

which conditional order was passed.  It is the case of the

respondents-plaintiffs that, when such conditional interim

order was notified in the newspaper, they have come to know

about the earlier agreement entered into by the appellants

with respondent No.4 and they approached the 4th respondent

and handed over the original agreement dated 3.5.2005 and

the receipt to the 4th respondent.  It is the specific case

of the appellants that when they have come to know about the

document dated 3.5.2005 in the suit filed by 4th respondent

herein, they have come to know tampering and fabrication of

the document, as such they have filed I.A.No.61 of 2006 in

CS(OS) No.1508 of 2005 under Section 340 of Cr.P.C., on

3.1.2006.  The present suit in CS(OS) No.2046 is filed by

the respondents-plaintiffs, subsequently, on 1.11.2006.  In

the said suit, the appellants-defendants have filed written

statement  on  25.1.2007  by  raising  specific  preliminary

objection that the agreement dated 3.5.2005 is forged and

fabricated, as such, they are liable for prosecution under

Section 195(1)(b) of Cr.P.C. In the written statement, apart

from other allegations, specific plea is made that suit is

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barred  in  view  of  provisions  of  Section  16(c)  of  the

Specific  Relief  Act,  1963,  in  absence  of  any  plea  of

readiness  and  willingness  by  the  respondents-plaintiffs.

While  admitting  the  arrangement  entered  into  with  the

respondents-plaintiffs,  it  is  the  case  of  the  appellants

that the terms of the agreement were not concretized.  As

such almost all the necessary columns were left blank in the

agreement dated 3.5.2005. It is not necessary to refer in

detail the further averments made in the written statement

for the disposal of this appeal before us. Subsequent to the

filing of the written statement, the respondents-plaintiffs

have filed the present application under Order XII rule 6 of

CPC on 9.2.2007 for which reply was filed by the appellants

on  19.3.2007.   In  the  reply  filed  on  behalf  of  the

appellants  and  other  defendants  in  I.A.No.1557  of  2006,

opposing the relief sought for on the ground that in absence

of  any  categorical  and  unconditional  admissions,  relief

cannot be granted.  The application in I.A.No.1557 of 2007

is filed only on the ground that in the bail petition filed

by  the  appellants,  in  connection  with  the  criminal  case

registered,  arising  out  of  a  complaint  filed  by  the  4th

S.L.P.(C) No.31176 of 2018                                                                                             26

respondent,  the  appellants’  counsel  has  pleaded  his

readiness to fulfill the contract entered into on 3.5.2005.

Except  the  said  plea  of  admission  there  is  no  other

admission, claimed in the application.  The learned Single

Judge has rightly rejected the application vide order dated

24.7.2017. In the order the learned Single Judge of the High

Court has held that in view of the stand of the appellants

that the agreement dated 3.5.2005 is a fabricated one and

the signatures of the 2nd appellant are fabricated on pages 3

and 4 of the agreement, such issues can be resolved only

after trial.  But same is no ground to deliver judgment on

claimed admissions.  The learned Single Judge has held in

paras 41 and 42 of the judgment as under:

“41.The  aforesaid  raises  a  serious  dispute  as  to whether, or not, the defendants have actually received the  amount  of  Rs.5  Crores  under  the  agreement,  as alleged  by  the  plaintiffs,  or  only  Rs.2  Crores  by cheque  as  alleged  by  defendant  Nos.  1  to  6.   The defendants  have  alleged  that  the  two  pages  of  the agreement,  which,  inter  alia,  record  the  receipt  of Rs.5  Crores  by  the  defendants  under  the  agreement  – including Rs.3 Crores in cash, have been replaced with pages  which  bear  the  forged  signatures  of  defendant No.2.  On this aspect, additional issues were framed by the Court on 05.05.2010.  Since the plaintiffs claim to have made cash payments of a very large amount of Rs.3 Crores under the agreement, which have been disputed by the defendants, it would be for the plaintiffs to prove the same, inter alia, by showing the availability of such large amounts of cash with them on the relevant dates.  In my view, till those issues are decided –

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which are issues of fact, it cannot be said at this stage  with  certainty  whether  the  agreement  dated 03.05.2005  relied  upon  by  the  plaintiffs  is  the  one entered into between the parties, or not.

42. It is well-settled that to entitle a plaintiff to a decree on admission, it is essential that the admission made  by  the  defendant  in  respect  of  the  plaintiffs case/claim  should  be  clear  and  unequivocal.  In  the present case, the only admission made by the defendant No.1 to 6 is in relation to their entering into the agreement/MOU with the plaintiffs for sale of the suit property; the goodwill of South Delhi Toyota, and; the net assets of the said business.  It was also agreed that the sale consideration for the suit property was Rs.49 Crores; for the goodwill of the business of South Delhi Toyota was Rs.6.50 Crores and; for the sale of the net worth of the business of South Delhi Toyota, the  same  amount  was  to  be  transferred  to  the defendants.   To  this  extent,  it  could  be  said  that there are admissions made by the defendants No. 1 to 6. However, there is a serious dispute as to whether the plaintiffs have paid Rs.5 Crores, i.e. Rs.2 Crores by cheque and Rs.3 Crores in cash to defendants No.1 to 6, or only Rs.2 crores by cheque.  This dispute goes to the  root  of  the  mater.   Unless  and  until  the  said dispute  is  resolved  in  favour  of  the  plaintiffs,  no decree for specific performance of the agreement can be passed  by  the  Court.   Pertinently,  the  Court  has already framed issues of fact on the aforesaid aspect.”

28. On appeal the Division Bench has set aside the order

of the learned Single Judge and held that the appellants

have admitted execution of the agreement dated 3.5.2005.  At

this stage, it is to be noticed that all throughout, the

case of the appellants is that though they have entered into

arrangement/agreement  on  7.4.2005  and  3.5.2005  with  the

respondents-plaintiffs and received Rs. Two crores by way of

S.L.P.(C) No.31176 of 2018                                                                                             28

cheque  but  such  agreement  is  fabricated  by  forging

signatures on pages 3 and 4 of the agreement.  In view of

such stand of the appellants, we are of the view that the

mere admission of entering into arrangement/agreement dated

3.5.2005 cannot be termed as a categorical and unconditional

admission for the purpose of delivering judgment by allowing

the application filed under Order XII Rule 6 of CPC. It is

to be noticed at this stage that even before filing of the

present suit in CS(OS) NO.2046 of 2006, when the document

dated 3.5.2005 was produced in the suit filed by the 4th

respondent  Mr.  Praveen  Kumar  Jolly,  the  appellants  have

filed  I.A.  No.61  of  2006  in  CS(OS)  No.1508  of  2005  on

3.1.2006. In the aforesaid I.A., there was a challenge to

the  genuineness  of  the  agreement  dated  3.5.2005  which

application  was  subsequently  disposed  of  on  7.12.2016.

The  present  suit  in  CS(OS)  No.2046  of  2006  was  filed

subsequently on 1.11.2006.  The Division Bench of the High

Court has proceeded on the premise that there is no dispute

on the agreement to sell dated 3.5.2005. At this stage, it

is to be noted that the suit in C.S.(OS) No.1508 of 2005 was

filed for specific performance of the agreement by the 4th

S.L.P.(C) No.31176 of 2018                                                                                             29

respondent and on production  of the agreement to sell dated

3.5.2005,  they  have  already  filed  I.A.No.61  of  2006,

alleging that there was a fabrication of the document dated

3.5.2005 and their signatures were forged on pages 3 and 4.

In view of such plea of appellants, we are of the considered

opinion  that  such  admissions  are  erroneously  treated  as

categorical  and  unconditional  admissions  by  the  Division

Bench of the High Court for the purpose of disposal of the

application filed under Order XII Rule 6 of CPC.  Further,

the Division Bench has relied on balance sheets of the first

appellant company for the years 2004-05, 2005-06 and 2006-07

and also the letter alleged to have been addressed by the

auditor.   On  the  aforesaid  documents,  the  plea  of  the

appellants  is  that  such  documents  also  are  forged  and

fabricated balance sheets which were submitted before the

ROC by their auditor Mr. S.R. Varshney in connivance with

Mr. T.R. Arya (respondent No.3 herein), who is a common

chartered accountant for the appellants and respondent Nos.

1 and 2. Allegations and counter allegations are made by the

parties in respect of balance sheets and other documents

relating to the company, the merits of which can be gone

S.L.P.(C) No.31176 of 2018                                                                                             30

into only at the time of trial where the parties will have

opportunity of adducing evidence and explain their stand.

29. In the judgment in the case of  Himani Alloys Limited

vs.  Tata Steel Limited (supra), nature and scope of Order

XII  Rule  6  has  been  considered  by  this  Court.   In  the

aforesaid judgment this Court has held that the discretion

conferred under Order XII Rule 6 of CPC is to be exercised

judiciously, keeping in mind that a judgment on admission is

a judgment without trial which permanently denies any remedy

to the defendant.  Para 11 of the judgment read as under:-

“11.  It is true that a judgment can be given on an “admission” contained in the minutes of a meeting. But the admission should be categorical. It should be a conscious and deliberate act of the party making it, showing an intention to be bound by it. Order 12 Rule 6 being an enabling provision, it  is  neither mandatory nor peremptory but discretionary.  The court,  on examination of  the facts  and  circumstances,  has  to  exercise  its  judicial  discretion, keeping  in  mind  that  a  judgment  on  admission  is  a  judgment without  trial  which  permanently  denies  any  remedy  to  the defendant, by way of an appeal on merits. Therefore unless the admission is clear, unambiguous and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim. In short the discretion should be used only when there is a clear “admission” which can be acted upon. (See also Uttam Singh Duggal & Co. Ltd. v. United Bank of India [(2000)  7  SCC  120]  ,  Karam Kapahi v.  Lal  Chand  Public Charitable Trust (2010) 4 SCC 753 : (2010) 2 SCC (Civ) 262] and Jeevan Diesels and Electricals Ltd. v. Jasbir Singh Chadha [(2010) 6 SCC 601 : (2010) 2 SCC (Civ) 745] .) There is no such admission in this case.”

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30. In  the  judgment  in  the  case  of  S.M.  Asif  vs.

Virender Kumar Bajaj (supra), this Court has held that the

power under Order XII Rule 6 of CPC is discretionary and

cannot be claimed as a right.  It is further held in the

aforesaid  case  that  where  the  defendants  have  raised

objections, which go to root of the case, it would not be

appropriate to exercise discretion under Order XII Rule 6 of

CPC.  Para 8 of the judgment read as under:-

“8.  The words in Order 12 Rule 6 CPC “may” and “make such order  …”  show  that  the  power  under  Order  12  Rule  6  CPC  is discretionary  and  cannot  be  claimed  as  a  matter  of  right. Judgment on admission is  not a matter of  right and rather is a matter  of  discretion  of  the  court.  Where  the  defendants  have raised objections which go to the root of the case, it would not be appropriate to exercise the discretion under Order 12 Rule 6 CPC. The said rule is an enabling provision which confers discretion on the court in delivering a quick judgment on admission and to the extent  of  the  claim  admitted  by  one  of  the  parties  of  his opponent's claim.”

31. In the judgment in the case of  Balraj Taneja and

another  vs.  Sunil  Madan  and  another  (supra),  while

considering the scope of Order VIII Rule 10 and Order XII

Rule 6 of CPC, this Court has held that the court is not to

act  blindly  upon  the  admission  of  a  fact  made  by  the

defendant  in  the  written  statement  nor  should  the  court

proceed to pass judgment blindly merely because a written

S.L.P.(C) No.31176 of 2018                                                                                             32

statement has not been filed by the defendant traversing the

facts set out by the plaintiff in the plaint filed in the

court.  

32. In the aforesaid judgment, while considering the scope

of Order XII Rule 6 of CPC, post amendment by amending Act,

1976 this Court has held as under:

“21.There  is  yet  another  provision  under  which  it  is possible  for  the  court  to  pronounce  judgment  on admission. This is contained in Rule 6 of Order 12 which provides as under:

“6.  Judgment on admissions.—(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the court may  at  any  stage  of  the  suit,  either  on  the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give  such  judgment  as  it  may  think  fit,  having regard to such admissions.

(2) Whenever a judgment is pronounced under sub- rule (1) a decree shall be drawn up in accordance with the judgment and the decree shall bear the date on which the judgment was pronounced.”

22. This rule was substituted in place of the old rule by the Code of Civil Procedure (Amendment) Act, 1976. The Objects and Reasons for this amendment are given below:

“Under Rule 6, where a claim is admitted, the court has jurisdiction to enter a judgment for the  plaintiff  and  to  pass  a  decree  on  the admitted claim. The object of the rule is to enable a party to obtain a speedy judgment at

S.L.P.(C) No.31176 of 2018                                                                                             33

least  to  the  extent  of  the  relief  to  which, according to the admission of the defendant, the plaintiff is entitled. The rule is wide enough to  cover  oral  admissions.  The  rule  is  being amended to clarify that oral admissions are also covered by the rule.”

23. Under this rule, the court can, at an interlocutory stage of the proceedings, pass a judgment on the basis of admissions made by the defendant. But before the court can act  upon  the  admission,  it  has  to  be  shown  that  the admission is unequivocal, clear and positive. This rule empowers the court to pass judgment and decree in respect of admitted claims pending adjudication of the disputed claims in the suit.”

33. By applying the ratio laid down by this Court in the

aforesaid judgments, it is to be held that there are no

categorical and unconditional admissions, as claimed by the

respondents-plaintiffs.  In  view  of  the  stand  of  the

appellants that, the pages 3 and 4 of the agreement dated

3.5.2005 are tampered and their signatures are fabricated,

when specific issue is already framed, it cannot be said

that there are categorical and unconditional admissions by

the  appellants.  Mere  admission  of  entering  into

arrangement/contract on 7.4.2005 and 3.5.2005 itself cannot

be considered in isolation, without considering the further

objections  of  the  appellants  that  certain  pages  in  the

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agreement are fabricated.  In case the appellants prove that

the agreement is fabricated as claimed, post trial it goes

to the root of the case on the claim of the respondents-

plaintiffs.  Hence, we are of the view that the aforesaid

judgments fully support the case of the appellants.  

34. Learned  counsel  for  the  respondents-plaintiffs  Sri

Shyam Divan, relying on the judgment of this Court in the

case of  Uttam Singh Duggal & Co. Ltd. vs. United Bank of

India (supra) has submitted that in view of the balance

sheets  and  resolutions  of  the  company,  they  are  to  be

considered  as  admissions  otherwise  it  will  amount  to

narrowing  down  the  scope  of  the  Rule  itself.   In  the

aforesaid judgment itself, this Court has held that when a

statement of admission is brought before the Court, as long

as  the  party  making  the  statement  is  given  sufficient

opportunity  to  explain  such  admissions,  judgment  on

admission can be delivered. In the case on hand it is to be

noted that the relief claimed under Order XII Rule 6 of CPC

by  filing  a  written  application  claiming  admission  only

based on the statement made by the advocate in the bail

application, and there is no other pleaded admissions, in

S.L.P.(C) No.31176 of 2018                                                                                             35

the application filed by the respondents-plaintiffs. It is a

trite principle that any amount of evidence is of no help,

in absence of pleading and foundation in the application. It

is true that when categorical and unconditional admissions

are there, judgment on admission can be ordered, without

narrowing down the Rule but at the same time the judicious

discretion conferred on the court is to be exercised within

the framework of the Rule but not beyond.  Even on balance

sheets of the company and the note of one of the Directors,

it is the specific case of the appellants that the third

respondent, in connivance with the respondents-plaintiffs,

is also working against the appellants.  In that view of the

matter the claim of the respondents-plaintiffs relying on

the documents relating to company is to be considered with

reference to the defence of the appellants during trial in

the suit.   

35. In the judgment in the case of  Karam Kapahi & Ors.

vs.  Lal Chand Public Charitable Trust & Anr. (supra), this

Court has interpreted the expression “otherwise” as used in

Order XII Rule 6 of CPC and has held that the scope of the

said  provision  of  the  Order  XII  Rule  6  is  wider  in

S.L.P.(C) No.31176 of 2018                                                                                             36

comparison to provision of Order XII Rule 1 of CPC. It is

true that after amendment, scope of the Rule under Order XII

Rule  6  is  expanded  but  at  the  same  time  the  expression

“otherwise”  inserted  in  Order  XII  Rule  6  is  also  to  be

considered within the framework of the Rule but not beyond.

In  any  event,  even  in  a  given  case,  the  admissions  are

categorical and unconditional, whether any inference can be

drawn on admissions having regard to documents placed on

record, is a matter to be considered having regard to facts

of each case.  There cannot be any straight jacket formula

to extend the benefit of Order XII Rule 6 of CPC.   

36. In  the  judgment  in  the  case  of  Usha  Rectifier

Corporation (India) Limited   vs.  Commissioner of Central

Excise,  New  Delhi (supra)  relied  on  by  learned  senior

counsel Sri Shyam Divan, this Court has held that entries

made in the balance sheets filed on behalf of the company

are to be treated as admissions and the appellant cannot

turn around and take stand, contrary to such admissions but

in  this  case  from  the  beginning  it  is  the  case  of  the

appellants that the third respondent is in connivance with

the respondents-plaintiffs.

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37. In this case it is to be noted that the suit was filed

on 1.11.2006 and written statement was filed on 25.01.2007

and the application under Order XII Rule 6 was filed on

9.2.2007.  In year 2010 issues and additional issues were

framed and trial is also commenced.  In that view of the

matter, there is no reason to pass the impugned order now

for decreeing the suit on claimed admissions, in exercise of

power under Order XII rule 6 of CPC at this stage.  In view

of  the  serious  factual  disputes  and  the  defence  of  the

appellants in the suit, it is not permissible for making

roving inquiry for disposal of the application filed under

Order  XII  Rule  6  of  CPC.   When  the  trial  is  already

commenced, it is desirable to record findings on various

contentious issues and disputes in the suit on merits by

appreciating  evidence  but  at  the  same  time  there  is  no

reason or justification to decree the suit at this stage.

For  the  aforesaid  reasons,  we  are  of  the  view  that  the

impugned judgment of the High Court cannot be sustained and

is liable to be set aside on this ground alone.

38. Further it is also to be noted that the suit is for

specific performance of the agreement of sale.  The relief

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sought is equitable and discretionary relief.  The readiness

and willingness on the part of plaintiffs to execute the

document is to be pleaded and proved.  At first instance in

the plaint filed on 1.11.2006 there was no such averment at

all.  Subsequent to the filing of the written statement,

interlocutory  application  No.3370  of  2007  was  filed  on

20.3.2007  to  incorporate  the  plea  of  readiness  and

willingness on the part of the respondents-plaintiffs in the

plaint, which was allowed subsequently. The readiness and

willingness on the part of the respondents-plaintiffs cannot

be inferred merely on the ground that they have deposited

the balance amount after the impugned order is passed.  Even

in absence of refusal of the application for amendment of

written  statement,  it  is  obligatory  on  the  part  of  the

plaintiffs to prove that they were willing and ready to

perform  the  contract,  to  claim  the  equitable  relief  of

specific performance.  In the judgment relied on by Sri P.S.

Narsimha, learned senior counsel in the case of  Aniglase

Yohannan  vs.  Ramlatha and Ors. (supra), this Court has

held that the basic principle behind Section 16(c) read with

Explanation (ii) of the Specific Relief Act, is that any

S.L.P.(C) No.31176 of 2018                                                                                             39

person  seeking  benefit  of  the  specific  performance  of

contract must manifest that his conduct has been blemishless

throughout entitling him to the specific relief.  In the

aforesaid  judgment  this  Court  has  further  held  that  the

court is to grant relief on the basis of the conduct of the

person seeking relief.  Paras 12 and 13 of the judgment read

as under:-

“12.The basic principle behind Section 16(c) read with Explanation (ii) is that any person seeking benefit of the specific performance of contract must manifest that his conduct has been blemishless throughout entitling him  to  the  specific  relief.  The  provision  imposes  a personal bar. The Court is to grant relief on the basis of the conduct of the person seeking relief. If the pleadings  manifest  that  the  conduct  of  the  plaintiff entitles him to get the relief on perusal of the plaint he should not be denied the relief.

13. Section 16(c) of the Act mandates the plaintiff to aver in the plaint and establish the fact by evidence aliunde that he has always been ready and willing to perform his part of the contract. On considering almost an identical fact situation it was held by this Court in Surya Narain Upadhyaya v. Ram Roop Pandey 1995 Supp (4) SCC  542  :  AIR  1994  SC  542]  that  the  plaintiff  had substantiated his plea.”

The said judgment of this Court also supports the plea of

the appellants herein.  

39. The  learned  counsels  appearing  for  the  appellants,  have

also contended stating that as per the directions of the High

Court  remaining  balance  amount,  as  per  the  agreement  dated

S.L.P.(C) No.31176 of 2018                                                                                             40

03.05.2005, is not deposited by the respondents-plaintiffs, and

the said amount is deposited by a third party who has no concern

in the matter. In view of our findings recorded above on other

issues, we are of the opinion that it is not necessary to deal

with the said contention.  

40.    For the aforesaid reasons we are of the view that the

High Court fell in error in passing the impugned judgment,

decreeing  the  suit  by  delivering  the  judgment  on  the

application  filed  under  Order  XII  Rule  6  of  CPC.  The

impugned judgment is liable to be set aside.  Accordingly,

the  same  is  set  aside,  with  no  order  as  to  costs.

Accordingly, the appeal is allowed and the impugned judgment

dated 2nd August, 2018 rendered in FAO(OS) No.268 of 2017 is

set aside and the order of the learned Single Judge dated

24th July, 2017  passed in I.A.No.1557 of 2007 is restored.

Consequently, the aforesaid  I.A. No. 1557 of 2007 stands

dismissed, with no order as to costs.  

41. As  it  is  pleaded  that  after  the  impugned  order  is

passed,  the  respondents-plaintiffs  have  deposited  the

balance  consideration  amount,  they  are  entitled  for  the

refund of the same along with accrued interest, if any.

S.L.P.(C) No.31176 of 2018                                                                                             41

42. We  also  make  it  clear  that  the  findings  and

observations made by this Court are confined only for the

purpose  of  the  application  filed  by  the  respondents-

plaintiffs under Order XII Rule 6 of CPC and all contentions

of the parties are left open and it is open for the High

Court to record findings on various issues which fall for

consideration in the suit on its own merits. We also request

the High Court to expedite the trial in CS(OS) No. 2046 of

2006.      

.................... J. [R. Banumathi]

.................... J. [R. Subhash Reddy]

New Delhi April 24, 2019